Here’s what dentsu’s global restructuring will mean for India

• dentsu International is undergoing a massive global restructuring and will cut down around 6,000 jobs globally in the next two years.
• It will also consolidate it's 160+ global brands to six global leadership brands.
• We talk to Anand Bhadkamkar, CEO, India, dentsu, who tells us the impact this global consolidation will have on its India business.

Japanese advertising network dentsu International is undergoing a massive global restructuring. The company announced last week that as a part of its accelerated restructuring plans, it will cut down around 12.5% or roughly 6,000 jobs globally.

In an official statement, a dentsu spokesperson said, “Consumer intelligence is at the heart of everything we do at dentsu international. We believe integrating our business around the consumer is the greatest advantage we can give our clients and the greatest competitive advantage we can give ourselves. We will do this by accelerating the transformation journey we started last year to simplify further how we operate, delivering even greater agility through a focused portfolio of six global leadership brands with prioritized investment and resources in capabilities of high client demand and growth.

“In our H1 2020 financial results, we announced a comprehensive review of our business. As we work through this process, we will take the critical and necessary steps, that many other companies are, to address the impacts the global pandemic has had on our business and ensure we work closely with our people and our clients as we move through this period of accelerated transformation.”

As a part of the restructuring, denstu will consolidate its 160+ brands into 6 consolidated leadership brands - Carat, Merkle, dentsu X, iProspect, dentsumcgarrybowen, and Isobar.

Closer home, dentsu India Network currently has around 3,200 employees under its 20 agencies. In a recent conversation with Anand Bhadkamkar, CEO, India, dentsu, we tried to understand what the global restructuring will mean for dentsu in India, and whether employees in India need to worry about the proposed jobcuts.

Excerpts:

Q) Dentsu has announced a massive restructuring globally, which will also include around 6000 job cuts. What kind of impact will this have on dentsu India?

Globally, we are reorganizing our businesses under three service lines – Creative, Media and Customer Experience Management. Currently, on a global level, we have around 160 brands that are a part of the organization and dentsu is planning to bring that down to six global brands by the end of 2022. In India, along with the 6 brands, Carat, Merkle, dentsu X, iProspect, dentsumcgarrybowen, and Isobar, we will have Posterscope as an additional brand because OOH has been our strength over the last few years.

Currently, almost 45% of our revenue is coming from Digital. While the pandemic affected OOH and Experiential really badly, things should start to come back to normal soon.

The global restructuring is more about centralization of capabilities across service lines and we aim to achieve this over the next 2 years. The idea is to ultimately stand true to our One Dentsu strategy. Our focus will be on bringing the best of our services and capabilities to our clients and providing those specializations without any hassles.

In India, increasingly we will invest in the high growth areas. We are quite strong on digital, be it performance, customer experience, social media or digital transformation journeys for our clients. We will continue investing in those areas. And as part of our overall business process, the underperforming teams or staff will be re-oriented.

Q) So how concerned do your employees in India need to be, considering there are plans of job cuts globally?

Globally they need to restructure 160 brands to 6. In India, things won’t be as drastic because we have already started our consolidation journey. All our businesses are working closely, based on our One Dentsu strategy. It is more about re-investing in the high-growth areas.

Q) There is a talk that globally Dentsu will aim to reduce its focus on the traditional creative and media agencies and focus more on the data-focused businesses. Will the organization go a similar route in India too?

It is not about reducing focus on traditional creative or media versus data focused businesses, but working with the clients on solving their business problems. The focus is on partnering with clients to help them gain competitive advantage in the market. As a network, we are ideas-led, tech-enabled and data-driven, and that is at the core of everything Dentsu does. So, ideas will always remain at the center of whatever we do. The solution can be either through creative, digital or personalized experience, based on the client problem we need to solve. So overall our focus remains unchanged. However, the current year has led to a lot of changes. Consumer behavior has undergone a lot of change, adoption of digital has fast tracked which is resulting in the entire value-chain moving to digital platforms or e-commerce. So our focus and investments will be on coming up with the best solutions for our clients on their digital transformation journeys. A lot of our investments will go to Adtech, Martech, content creation, providing personalized solutions and experiences will be critical for us.

Q) We’re almost at the end of 2020. As a leader, what will your key focus areas be in 2021?

2020 has been a challenging year, not just from a business but from a societal perspective. As an industry, we are seeing a de-growth of around 16-18%. So that has had an obvious impact on our business as we saw spends come down.

However, we started seeing recovery from Q3, during IPL and the festive period. The last quarter has been even better than we anticipated. Some of our agencies have also recovered much faster. And, our digital businesses have been doing well. So while overall the year has been muted, we have seen much faster recovery.

For 2021, our focus will remain on the high-growth areas – digital, providing relevant data driven solutions for clients and creating relevant experiences for consumers with investments in ad-tech, martech. We will also focus on e-commerce which we've been working on extensively with a lot of our clients across brands. Last year, there was also a lot of focus on voice, video and vernacular, and that will continue to remain a key focus area because it became even more relevant in this pandemic year. We are also seeing gradual recovery of OOH so we will also focus on Digital OOH next year.